Fewer private homes and more apartment buildings are being built - Report/ How is the real estate market transforming?
Deloitte’s latest Property Index report provides interesting data on the development of private housing with one, two or more floors in Albania. According to the report, the country has experienced a significant decline in the construction of low-rise housing, a trend that indicates a significant slowdown in private and small-scale construction by individual owners or private investors. Specifically, permits for single-story buildings fell by 52%, while those for two-story buildings decreased by 8.5%. In total, this translates into a 24.9% decline in private housing development compared to a year ago. Albania counted a ratio of 4.58 private housing units per 1,000 inhabitants.
On the other hand, the 2023 Census data show that there were 1,082,529 ordinary dwellings in Albania. Of these, 47% were individual houses, 39.9% were apartment buildings, 8.1% were semi-detached houses and 5% were terraced houses. Of these, 67.1% were occupied, while 32.9% remained unoccupied. Apartments in apartment buildings had the highest vacancy rate (39.4%), while for individual and terraced houses this figure varied around 29%.
These data suggest that the Albanian property market is gradually shifting from the construction of private houses towards the development of multi-storey buildings and towers. A good part of the plots where individual houses were previously built are now being converted into apartment buildings. This urban transformation shows not only a change in lifestyle, but also the orientation of investments towards the densification of residential areas.
However, this phenomenon is not isolated to Albania. The Deloitte report highlights that several other European countries are facing the same trend. Italy, for example, recorded the lowest number of new private housing starts, with only 0.94 per 1,000 inhabitants, while the United Kingdom and Bosnia and Herzegovina had 1.58 and 1.67 per 1,000 inhabitants respectively. In contrast, Ireland led the way with 12.84 new private housing starts per 1,000 inhabitants, reflecting a much higher pace of construction development.
At the European level, Turkey continues to be the most active market, with around 766,100 new private housing starts in 2024, surpassing France, Poland and Germany. This comparison shows that, while some markets are experiencing a slowdown, others are experiencing a construction boom, a contrast that makes the shift in construction dynamics in Albania and the region even more visible.
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